Ralph LaRossa, the executive who led Public Service Electric & Gas through a huge modernization of the century-old utility over the past few years, is getting a new job — with a more prominent position likely in his future.
The 54-year-old LaRossa, a self-described Jersey guy from Bergen County, will take over as president and chief operating officer of PSEG Power and its fleet of generating stations, which supplies electricity to most of the state. He starts October 2.
David Daly will take over the helm at the state’s largest electric and gas utility, serving as president and chief operating officer of PSE&G. The 55-year-old Daly joined the utility in 1983 and most recently was president and COO of PSEG Long Island.
For LaRossa, the promotion appears to confirm speculation that he is in line to replace his boss, Ralph Izzo, chairman, president, and CEO of PSEG, one of the state’s most influential and biggest employers.
In announcing the new job, the 59-year-old Izzo hinted his longtime colleague would eventually replace him in the company’s press release on Friday. “Moreover, the broadening of Ralph’s background is consistent with our long-term succession-planning efforts,’’ Izzo said.
In taking over PSEG Power, LaRossa faces some tough issues in a tumultuous energy sector. Cheap natural gas prices have lowered prices for power suppliers. That’s a boon to consumers, but has punished the bottom line for generators using nuclear and coal.
Closing down coal plants
PSEG earlier this month closed its two remaining coal plants in New Jersey at Hudson and Mercer, and the company is pushing hard to win financial incentives for its three nuclear units, which Izzo has threatened to close if they start losing money.
Less than a decade ago, PSEG Power was the primary driver of profits for its Newark parent, pulling in more than two-thirds of PSEG’s earnings. Today, PSE&G has reversed that role, increasing its profits with a huge investment program that is expected to run more than $13 billion over the next five years, most of it devoted to the utility.
The spending includes building new transmission lines; improving the utility’s resiliency to extreme storms; and modernizing its aging gas pipelines.
At PSE&G, LaRossa, a well-known and well-regarded figure to the state’s powers that be, also presided over the utility during the spate of huge storms that left millions without power, most notably Hurricane Sandy. The storm flooded dozens of substations, knocking out power to customers for a week or more in some cases.
In its aftermath, PSE&G won approval from state regulators for a $1.2 billion Energy Strong program to enhance its distribution system and to make it more resilient to avoid long blackouts in the future.
LaRossa joined the utility in 1985, advancing through a variety of management positions in the utility’s gas and electric operations. He had been president at PSE&G since 2006, eventually leading the utility through its largest capital program in its history.
The designation as heir apparent to run PSEG is not unexpected. “It doesn’t surprise me, given the long time Ralph has worked there,’’ said Paul Patterson, an energy analyst at Glenrock Associates in New York City.